A Portrait of Chinese Traders in Dakar, Senegal

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A Portrait of Chinese Traders in Dakar, Senegal

July 18, 2013

Feature

By Daouda Cissé

Many Dakarians often find it beneficial to have access to cheap Chinese goods. However, some Senegalese trade unions oppose allowing Chinese migrants to run businesses because they bring unfair competition to local businesses. (Author's fieldwork photo)

While long-established Chinatowns thrive in cities across Asia, Europe, and North America, China's new ties with emerging economies are now leading to a growing number of Chinese migrants in Africa. Although many analysts point out that Sino-African relations are heavily linked to natural resources extraction, since the mid-2000s China has also shown interest in African countries that do not hold major deposits of oil, gold, diamonds, or timber—for instance, the West African country of Senegal.

Senegal's geographic location and political stability make the country attractive for foreign trade partners—traditional and emerging alike—that are looking for new, reliable markets for their manufactured goods. For their own part, Senegalese officials seek diversified investment opportunities and trade partners, and a stronger position in international affairs—goals that compel them to cooperate with China.

Although diplomatic relations between China and Senegal date back to 1971 (with an interruption from 1996 to 2005 during which Senegal officially recognized Taiwan), the growing Chinese presence in Senegal is a relatively recent phenomenon. Since 2005, many Chinese (mostly state-owned) companies have set up operations in Senegal—and brought with them large numbers of Chinese migrant workers and their families.

This article explores the growing presence of Chinese migrants in Senegal's capital, Dakar, and is based on fieldwork conducted in October 2012 in areas with the largest concentration of Chinese retail shops, including Avenue Charles de Gaulle (a neighborhood often called Centenaire) and les Allées Pape Guèye Fall. Informed by 60 interviews with Chinese small traders, Chinese and Senegalese shopkeepers, Senegalese retailers, Centenaire residents, and Senegalese officials, the article investigates the Chinese traders' backgrounds and motives for settling in Senegal. It also discusses the implications of their move for their families, hometowns, and the local community in Dakar.

Chinese Migration to Africa

Estimates of the number of Chinese migrants in Africa vary widely, ranging from as high as 1 million to more cautious figures in the hundreds of thousands. Although small compared to the overall Chinese population, these numbers have grown rapidly over the past few decades. South Africa hosts the largest Chinese community (see Living in Between: The Chinese in South Africa).

With a significant Chinese presence in nearly every large African city, Chinese shops are expanding South-South trade relations. The increasing number of Chinese traders has created competition among them, which is why many have decided to explore other business sectors and geographical areas by settling in rural and small African towns.

Changes in China's emigration policies in the 1970s and 80s—the state issued passports and opened borders—enabled Chinese citizens to travel to other regions of the world for tourism, education, employment, trade, and business. The “open door” policy of 1978 and the industrial and entrepreneurial reforms of the 1980s drove millions of Chinese abroad, mainly to Southeast Asian countries including Malaysia, Singapore, and Indonesia.

Further migration policy reforms in 1985 and China's “go out” policy of the late 1990s encouraged large numbers of Chinese workers to venture into Africa with state-owned companies.

The Chinese in Africa today are commonly entrepreneurs or traders looking for business opportunities (and increasingly, their family members). In addition, Chinese companies continue to bring their nationals on short-term labor contracts (two or three years, sometimes renewable) to work on state projects in construction, infrastructure, mining, and oil.

Although many Chinese workers in Africa return to China at the end of their contracts, some decide to stay for business-related activities. Using capital earned in both China and Africa, they often aspire to build upon social and business networks in their host country to open small and medium sized businesses in trade, catering, and construction.

Sino-Senegalese Relations

Although Senegal has had relations with China on and off since 1971, the year 2000 saw a new turn in Sino-Senegalese relations. To boost local investment and trade, the government of newly-elected President Abdoulaye Wade sought more diversified political and economic cooperation with emerging partners—China, India, and Turkey in particular.

In 2005, the agreement signed by then Presidents Wade of Senegal and Hu Jintao of China secured a new economic, political, and diplomatic partnership, thus putting aside past differences over Taiwan (which today has diplomatic ties in Africa with Burkina Faso, the Gambia, São-Tomé y Príncipe, and Swaziland, with Taipei liaison offices in South Africa and Nigeria as well). Senegal was granted zero-tariff treatment to export its products to China during the Forum of China-Africa Cooperation (FOCAC III) summit in Beijing in 2006.

However, similar to the experience of many African countries, Sino-Senegalese trade and economic cooperation remains unbalanced with Senegalese imports to China at just a fraction of Chinese exports to Senegal (see Table 1). As Stefan Gehrold and Lena Tietze argue in a 2011 study, “This kind of balance of trade is typical of China's dealings with African states and is another indicator of China's growing economic might in a global world, as well as of the overall importance of the African continent to China's foreign trade policy.”

Although Senegal has very few natural resources, it has a good reputation internationally for being a reliable partner in the area of development cooperation due to its political stability and diplomatic role in mediating conflicts in Africa. Since 2005, China has played an important role in providing foreign direct investment (FDI) and aid to Senegal.

In 2010, bilateral trade between China and Senegal reached U.S. $549 million and Chinese investment stock in Senegal was $45 million, mainly for infrastructure building (see Tables 1 and 2). Although possibly some Chinese shops' business transactions are conducted outside the formal sector and therefore not included in Senegal's GDP, most hold licenses to operate and pay taxes.

In contrast to Southern Africa, where Chinese migrants arrived as mine workers or entrepreneurs as early as the 1870s, Chinese migration to Senegal began on a small scale in the 1980s, spurred by the arrival of a Chinese company called Henan Construction. These early migrants saw opportunities to tap into local trade. Thanks to strong connections in China, they were able to order products at low prices directly from factories or wholesalers, and offer competitive prices compared to Senegalese merchants (who were then bringing in made-in-China consumer goods to resell in the Senegalese market).

Through social networks, more Chinese migrants arrived in Senegal in the late 1990s and early 2000s to explore business opportunities, often bringing family members with them.

The first Chinese residents in the Dakar neighborhood of Centenaire also arrived at this time of intense economic difficulty for many of the existing residents. According to one local resident interviewed, “My father never wanted to rent the garage to the Chinese traders. After his death, our family had a lot of social issues; therefore we were obliged to rent our garage to have incomes to support ourselves.” Some Centenaire residents also rented their houses to Chinese traders and left to live in Dakar's suburbs where rent was (and still is) lower.

A Portrait of Chinese Traders in Dakar Today

The majority of Chinese traders in Centenaire and Allées Papa Guèye Fall who were interviewed for this study came from Kaifeng, a prefecture-level city in Henan province in central China. A smaller number came from Sichuan, Fujian, and Shanghai. Although Henan province is the fifth largest provincial economy in China, its GDP remains low compared to coastal Chinese cities, and it is considered one of the least-developed areas in China. The main economic activities in the province are mining and agriculture. As such, most interviewees were previously factory workers or farmers in China. Very few had previously been business owners.

Their motivations for migrating to Senegal included entrepreneurship, following family members, and tourism—which often led them to realize that trade opportunities and the business environment were good. While some Chinese interviewees applied for visas through formal procedures, a large majority arrived via informal means such as family networks already based in Dakar, as well as Senegalese brokers and officials.

Many Chinese interviewees stated that they were shopkeepers rather shop owners. The shop owners—who provide their Chinese employees with accommodation, food, and basic needs—only pay out salaries once shopkeepers return to China (or fully reimburse their travel expenses in earnings). The arrangement facilitates the migration process for shopkeepers and also allows them to accumulate savings. For shop owners, this also functions as a guarantee that their employees do not leave or change employers once in Senegal.

For many of the migrants, plans for settling or relocating are fluid. Some Chinese traders had migrated from nearby countries to open shops in Dakar, while others reportedly leave Senegal to settle in other countries. Many of the Chinese shopkeepers interviewed, however, did not have clear ideas about their future plans to move to other countries. Most stated that they would stay in Senegal for two or three years, and then return to China. Echoing many others, one interviewee stated, “If the situation is ok here, we will stay. Otherwise we will explore other countries with less competition and better business opportunities. My aunt was in Dakar before, but now she is in Morocco with her husband where [there] seems to be [fewer] Chinese traders.”

Beyond the subset of Chinese interviewed, it is believed that Chinese migrants in Senegal overall come from different provinces or villages and speak different dialects, resulting in interesting social dynamics. One Senegalese interviewee observed, “The Chinese people are very particular. Here is a community in which people come across without greeting each other mainly if they don't originate from the same province or village. I think they only get along with each other based on their geographical origins and family ties.” Compared to many overseas communities whose relationships and networks are based on their country of origin or/and religion (i.e. Senegalese mouride brotherhood's members in Europe, the United States, etc.), the Chinese kinship particularly relies on family ties which, to them, guarantees trust.

Benefits for Some

Having begun as farmers or factory workers in China, many migrants improve their socioeconomic status by venturing to Africa in search of economic opportunities in trade and business. One interviewee stated: “I am here to make money for my family; particularly for my children at least to change their situation not to be in the same difficulties I went through and enable them to be educated in renowned universities overseas.”

Several interviewees also reported using their earnings in Senegal to help family members at home to start or expand businesses, or to finance projects. Almost all interviewees had plans to reinvest their income in China.

Some Senegalese have also benefited from the presence of the Chinese, through new opportunities to support themselves and their families. As one Senegalese retail trader explained: “I manage to pay for my children's school fees, ensure the household expenses, and even save.”

Senegalese traders periodically came from other regions to buy Chinese consumer goods in Centenaire and resell them in their own neighborhoods. One such trader from the town of Mbour stated, “With the establishment of the Chinese shops in Dakar, I come once a week to buy Chinese products. For instance, I can buy shirts for 900 CFA francs (about $1.80) a unit at a Chinese shop and resell them for 1,300-1,500 CFA francs (about $2.60-$3.00).” Similarly, another trader explained that the arrival of Chinese traders in Dakar had reduced business costs, as she previously had to travel to the Gambia and Mauritania to secure merchandise and was only able to collect on profits one or two months later. By buying and reselling the Chinese products in Dakar, she could collect the money without delay.

Now, some Senegalese traders travel to China themselves to arrange for importing Chinese consumer goods — and their success is continual motivation for other small traders in Senegal.

Competing Interests: Difficulties and Challenges

The Chinese presence in Senegal has nevertheless led to tensions and organized protests by trade unions including l'Union Nationale des Commerçants et Industriels du Sénégal (UNACOIS) and l'Association des consommateurs du Sénégal (ASCOSEN)—the former defending traders' and manufacturers' rights and the latter defending Senegalese consumers. The trade unions oppose allowing Chinese migrants to run businesses in Senegal, claiming that they bring unfair competition to local businesses. Consumers, however, often find it beneficial to have access to cheap Chinese goods, especially considering their low purchasing power since the devaluation of the CFA franc in 1994. In addition, rivalry in the Senegalese trade sector has complicated relations between the different trade communities—including the Chinese and Senegalese, but also other African and Lebanese traders as well.

Some Chinese traders (as well as other foreign traders in Dakar) have voiced concerns about personal security. One shop owner in Centenaire stated, “Some Chinese have died here. Some have lost important sums of money. Last year a Chinese woman has died in her house while her son went to China. During the 2012 Senegalese presidential elections period, three Chinese shops have been burnt due to political protests.”

Cultural differences and communication are among the main challenges for the Chinese in Dakar. The insular nature of the Chinese community there also makes integration into Senegalese society a formidable challenge, and many expressed regret about living far from relatives and friends in China. A young Chinese shopkeeper who dropped out of middle school and came to Senegal by his father stated, “I really miss home but I need to make money; therefore I have to stay here and probably later take over the business.”

Chinese interviewees also complained that they did not receive support or assistance from their embassy in Dakar. The absence of an organized Chinese traders' association to defend their interests, was another recurring concern.

While Chinese traders affirmed that they had good relationships with their Senegalese employees, the latter sometimes complained of complications. One female Senegalese shopkeeper stated, “While working with the Chinese traders we have [a] language barrier; the communication is based on simple words in broken French or English. There is culture difference and the working conditions are difficult. I was working in another Chinese shop before this one but because of strict rules from my boss (not to answer my phone) I resigned. If you miss a working day, you are not paid. But because of the difficult job market in Senegal, I found an opportunity with the arrival of Chinese traders.”

Some community members argue that the Senegalese government should build marketplaces offering space to all traders in the informal trade sector. Renters would be required to regularly pay taxes and would be provided services such as cleaning, security, parking, toilets, and a food court. Although the Senegalese government has promised to pursue such a plan, no action has been taken to date.

Conclusion

During China's Cultural Revolution (1966-76), overseas Chinese were considered capitalists or enemies of the nation. Today, they contribute to China's economic integration by promoting their countries' exports, and aid its growth by accumulating social and financial capital to reinvest in home communities.

Thanks to know-how and know-who—the ability to tap into consumers' needs; and the ability to tap into business and family networks among manufacturers, wholesalers and other parts of the supply channels—Chinese traders have changed urban spaces and the small business environment in Senegal and across Africa. In doing so, they have heightened competition with local traders (although some manage to reap benefits) and among themselves. Yet despite the tensions and difficulties, their growing presence—and success—in the marketplace would not be possible without the support of local consumers and laissez-faire government attitudes.

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Author

Dr. Daouda Cissé is a research fellow at the Centre for Chinese Studies. He completed his Masters Degree in ‘Foreign Languages Applied to Business and International Trade’ at Gaston Berger University in Saint-Louis, Senegal.